TSMC shares returns to prior ex-dividend level upon opening

Taipei, March 17 (CNA) Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) returned to their Monday closing level as the stock market opened Tuesday morning after going ex-dividend.

When the market opened at 9 a.m., TSMC immediately rose to NT$1,875.00 (US$58.59), up NT$35 (US$1.09), or 1.90 percent, from the opening reference price of NT$1,840.00.

The opening reference price was NT$5 below the stock's closing price of NT$1,845 on Monday instead of the NT$6 paid as a dividend per share to TSMC shareholders for its third-quarter earnings because TSMC stock trades in minimum intervals of NT$5 due to its high price.

As of 9:44 a.m., TSMC, which accounts for over 40 percent of the market's total value, had risen 1.63 percent to NT$1,870.00, helping the Taiex, the Taiwan Stock Exchange's benchmark index, gain 1.58 percent to 33,868.49.

Dealers said TSMC's strength followed a 0.57 percent increase in its American depositary receipts overnight after Nvidia Corp. CEO Jensen Huang (黃仁勳) forecast at the company's GPU Technology Conference (GTC) that global demand for AI chips will stay robust.

The local market was also helped by a pullback in international crude prices, dealers said.

For companies in Taiwan that issue cash dividends annually, the ex-dividend date is the date on which a stock begins trading after the amount of the cash dividend to be paid out on the previous year's earnings has been deducted from the stock price.

TSMC started to issue cash dividends quarterly instead of annually in 2019.

When stocks like TSMC return to their prior ex-dividend levels, it indicates investors have faith in their fundamentals and are willing to hold onto them, dealers said.

Since TSMC started its quarterly cash dividend payout in 2019, the stock has quickly returned to its pre-ex-dividend levels 21 times on the day it went ex-dividend.

TSMC is scheduled to issue a total of about NT$155.60 billion in cash dividends on April 9.

TSMC Chairman C.C. Wei (魏哲家), who has 7.22 million TSMC shares, is expected to pocket NT$43.306 million.

The National Development Fund under the Executive Yuan, TSMC's largest shareholder with 1.65 billion shares, will pocket NT$9.92 billion.